Several mechanisms regulating macrophage functions in both inflammatory and immune responses have been elucidated. The biology and biochemistry of the colony stimulating factors (CSF) a group of immunomodulatory mediators have been studied. Methods have been developed for the production and partial purification of T-lymphocyte derived CSF. Serum-free supernatants of a stimulated cell line when chromatographed in sequence by hydrophobic, ion exchange and lectin affinity chromatography yielded material with a specific activity of greater than ten to the seven units/mg protein. The mechanism by which CSF modulates macrophage responsiveness to bacterial endotoxin was found to involve an intermediary interferon priming stage. Macrophage initiation of antigen-specific immune responses is dependent on cell surface expression of Ia antigens. Supernatants of lectin activated spleen cells (Con A sup) have been found to induce Ia- macrophages to express Ia antigens. Biochemical characterization of the Con A sup indicates that the active mediator is immune interferon. Conversely two mechanisms have been found that induce or maintain the Ia- state. Supernatant incubated Ia+ macrophages subsequently incubated in supernatant-free medium become Ia-. Also, bacterial endotoxin inhibits Con A sup induction of macrophage Ia antigen expression